TRIPOLI: Residents of Zawiya, the rebel-held city closest to Libya's capital, celebrated with a victory march Tuesday after repelling an overnight attack by Moummar Gaddafi's forces. But troops loyal to the longtime leader clamped down on a strategic mountain town as they fought to reclaim areas near Tripoli, residents said. With fighting spreading to other areas, the United States warned Tuesday that Libya could descend into a civil war unless Gaddafi quits. Demand for Gaddafi's departure have intensified putting pressure on the longtime leader after news of Western military preparations. But Gaddafi remained defiant, dispatching forces to a western border area amid fears that the most violent uprising may grow bloodier and spark a humanitarian crisis. His son, Saif Al-Islam, warned the West against launching any military action to topple Gaddafi, and said the veteran ruler would not step down or go into exile. “Using force against Libya is not acceptable. There's no reason, but if they want ... we are ready, we are not afraid,” he told Sky television, adding: “We live here, we die here.” In Moscow, a Kremlin source suggested Gaddafi, whose authority has unravelled in much of the vast desert country, should step down, calling him a “living political corpse”. In prepared testimony to US lawmakers in Washington, US Secretary of State Hillary Clinton said: “Libya could become a peaceful democracy or it could face protracted civil war.” The US Ambassador to the United Nations, Susan Rice, said Washington would apply pressure on Gaddafi until he bows out, working to stabilize oil prices and avert a humanitarian crisis. Western governments choked off funding to the Gaddafi regime Tuesday, freezing assets of the Libyan leader and his inner circle after the United Nations and European Union imposed sanctions. The US government was among the first to act on the UN resolution, announcing it had frozen at least $30 billion in Libyan assets and that further sanctions could be on the way. In Berlin, the German government said it was freezing a bank account held by an unnamed son of Gaddafi containing two million euros ($2.8 million). “Germany is working hand in hand with the European Union and is on the side of all those pressing for democracy and the rule of law,” Economy Minister Rainer Bruederle said. Announcing its own decision to freeze Gaddafi's assets, Austria's central bank said that Libyan deposits in Austrian banks amount to around 1.2 billion euros.The Netherlands will put into operation a freeze on Gaddfi's assets “as soon as possible,” the foreign ministry said in The Hague. The Zawiya rebels, who include mutinous army forces, are armed with tanks, machine guns and anti-aircraft guns. They fought back pro-Gaddafi troops, armed with the same weapons, who attacked from six directions. There was no word on casualties. “We will not give up Zawiya at any price,” said one witness. “We know it is significant strategically. They will fight to get it, but we will not give up. We managed to defeat them because our spirits are high and their spirits are zero.” Tripoli is a clear Gaddafi stronghold, but even in the capital, loyalties are divided. Many on the streets Tuesday expressed loyalty but one man who described himself as a military pilot said: “One hundred percent of Libyans don't like him.”
